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I'm thinking about investing in stocks, but I'm worried about losing my investments for reasons unrelated to changes in the market.

I know that brokerage accounts are not FDIC-insured.

  • What if a hacker logs in as me, sells my assets and moves the money somewhere?
  • What if the brokerage steals from my account?
  • What if the brokerage loses assets from my account unintentionally, due to software bugs?
  • etc.

What protections are there in place and should I trust them?

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    Added location tag. Based on FDIC, I assume you're asking about the US?
    – littleadv
    Jun 15, 2013 at 20:28

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A protection similar to FDIC for banks is provided to brokerage accounts' owners by SIPC. Neither FDIC nor SIPC provide protection or insurance against identity thefts or frauds, only bank/brokerage failures. Your investment losses are obviously not insured either.

For fraud liability check your bank/brokerage policies, you can get insurance for identity theft from your insurance provider (its an optional coverage with many home-owner/renter insurance policies).

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  • Thanks for pointing out that FDIC does not insure against fraud and theft. Apparently misleading statements are often made about it.
    – MWB
    Jun 16, 2013 at 20:59

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